Friday Financial Five – May 6, 2016
Friday, May 06, 2016
According to the Government Accountability Office, 60 percent of households had no savings in a defined contribution plan as of 2013. A huge percentage of workers had no access to plans at the time of the survey, especially those in lower income households. For the higher income earners, only eight percent had no savings in their retirement plan. The future of retirement will entail providing access to plans and educating workers on the importance of putting money away.
Puerto Rico defaults on bond payment
Puerto Rico recently paid only the interest portion of a $422 million bond payment, prioritizing “essential services” over paying the principal on the debt obligation. It presents a microcosm of other troubled cities facing financial hardship that may be forced to make a similar decision. The island is counting on Congress to put together an aid package to help address the $70 billion in debt, but there’s reluctance due to years of perceived financial mismanagement.
One of country’s largest pensions facing cuts
Hundreds of thousands of workers await a Treasury Department decision regarding the Central States Pension Fund, which filed an application to drastically reduce core benefits. The pension has $16 billion in assets but requires a dramatic overhaul to sustain financial viability. The decision by Kenneth Feinberg, “special master” for the Treasury Department, will have ramifications for other large organizations looking to restructure payouts. The possibility of restructure was made possible by the Kline-Miller Multiemployer Pension Reform Act of 2014, which allows changes if the pension is projected to run out of money.
Title I Home Improvement loans keep on going
The housing rebound has provided an overall increase in equity for owners, but there is still a viable option for those with mortgage amounts at or above the home’s market value. The Title I loan is offered through the U.S. Department of Housing and Urban Development and isn’t equity based. The borrower can take up to $25,000 for home improvements and without a prepayment penalty. This type of loan can also be used for the very popular switch to a solar based system in order to save on electricity bills.
Apps to teach kids about finance
The country still lags in financial literacy, and it’s never too early to start educating children early about the importance of valuing money, credit, and budgets. There is a huge selection of apps available to help in the process, but it may take some research to find the right combination. Kids Money bills itself as a way to teach kids about savings and pocket money management. Bankaroo allows kids to keep track of virtual bank balances. There’s even an app for “The Game of Life”, which involves major financial decisions.
Dan Forbes, a CFP Board Ambassador, is a regular contributor on financial issues. He leads the firm Forbes Financial Planning, Inc in East Greenwich, RI and can be reached at [email protected].
Related Slideshow: Massachusetts Business Rankings
See how Massachusetts stacked up.
Massachusetts has 2015's 28th highest insurance premium penalties for high risk drivers, according to a WalletHub report.
Mass is behind Colorado and New Mexico who come in at 26 and 27 spots respectively while Mass is ahead of Tennessee and the District of Columbia who rank 29 and 30 respectively.
Massachusetts ranks 14th overall in the category of DUI conviction annual premium increase with an amount of $756.
Massachusetts ranks 20th overall in the category of speeding over 20 mph annual premium increase with a total of $261 while ranking 21 overall in the category of two accidents annual premium increase with a total of $1,364.
Massachusetts has been ranked as the 5th most eco-friendly state in the country, according to a recent study by WalletHub.
Mass ranks tenth in environmental quality and fourth in Eco-Friendly Behaviors landing them in 8th overall.
Mass is behind Minnesota and New York who are in the fourth and third spots respectively, and in front of Washington and New Hampshire who come in at the six and seven spots.
Small Business Friendliness Grade: D+
The Economist grades states on an A+ to F grading scale for its small business climate. Massachusetts ranks near the bottom of the nation, joining New Mexico and New York in receiving D+ grades. 9 states scored worse than a D+ in the Economist rankings.
Overbearing bureaucracy and excessive licensing is stifling small business in America.
Forbes ranks each state in business costs, economic climate, and growth prospects.
The most damning in the commentary:
Massachusetts’ business costs, including labor, energy and taxes, are the highest of the 48 contiguous states—only Hawaii is higher—at 20% above the national average.
ChiefExecutive.net ranks each state in taxations and regulations, workforce quality, and living environment.
The most damning in the commentary:
Taxation and regulation are always the key barometers. Massachusetts and Oregon are the worst.
ALEC ranks each state in economic performance and outlook.
Although Massachusetts ranked low in economic performance, a forward-looking forecast is based on the state’s standing in 15 important state policy variables. Some of these variables include top marginal personal income tax rate and sales tax burden.
#18 Free Enterprise
Free Enterprise ranks each state in performance, exports, innovation + entrepreneurship, business climate, talent pipeline, infrastructure.
Massachusetts's reputation as a hotspot for science and technology endures in this year's rankings. The commonwealth is a center for STEM jobs and university research and development, ranking 4th and 2nd, respectively, in those two categories. It also ranks 6th as a center for high-tech establishments. Massachusetts is taking aggressive steps to bolster economic activity with high-impact university-industry R&D projects and new tools for tech-based startup companies.
The Pew Charitable Trusts
#45 The Pew Charitable Trusts
The Pew Charitable Trusts ranks each state in job growth and job creation.
Massachusetts added 38,368 jobs in 2014.
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- Friday Financial Five – November 13th, 2015
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- Friday Financial Five – October 2, 2015
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- Friday Financial Five – October 23, 2015
- Friday Financial Five – October 30, 2015
- Friday Financial Five – January 15, 2016
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- Friday Financial Five – March 25, 2016
- Friday Financial Five – March 18, 2016
- Friday Financial Five – April 1, 2016
- Friday Financial Five – April 8, 2016
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- Friday Financial Five – March 11, 2016
- Friday Financial Five – March 4, 2016
- Friday Financial Five – February 5, 2016
- Friday Financial Five – February 12, 2016
- Friday Financial Five – February 26, 2016
- Friday Financial Five – April 29, 2016
- Friday Financial Five – January 29, 2016